Daily Deals: A Taxing Question

DEALS DECODER BLOG — Ever wonder if the full value claimed on that teeth whitening or massage deal from Groupon or another daily deals source is the real price or an inflated number? Maybe you don’t care because the 50% or 80% off price seems reasonable. But did you know you may be asked to pay the sales tax on that full value?

It’s easy to assume the price you pay for a daily deals voucher is all there is to it. As it turns out, the merchants are responsible for collecting sales tax on the “full” value of the deal when you redeem your voucher, according to the California, Florida and Illinois tax administrators interviewed for a recent Forbes article by Janet Novak: Social Confusion: How Do Sales Taxes Apply To A Groupon?

This has been the source of confusion and often disappointment for both customers and merchants. The Forbes article goes on to explain that this tax question is a new wrinkle that will have to be ironed out in court. The outcome may change how closely we look at certain deals before we rush to buy.

Have you been stung by a stiff tax on a daily deal? Is this a big duh! Or a deal breaker?